Switzerland has long been considered a symbol of stability in Europe. Thanks to its reliable political system and rule of law, its financial center attracts international assets. But can geopolitical tensions affect this?
Uncertainty as the New Norm
Currently, global politics is becoming increasingly unstable. In the past, such situations would prompt businesses to seek safe havens for their assets, and Switzerland has always been one of those places. However, the modern world is more interconnected, and this trend forces banks to be more cautious.
Geopolitics and Finance: New Demands for Banks
Previously, business and politics were relatively independent of each other. Today, every bank needs to understand geopolitical processes. The conflict in Ukraine and tensions between the US and China compel the financial sector to analyze risks more deeply. The issue of debts in Europe and the US also puts pressure on the situation, although Switzerland has an advantage in relatively low debt burden.
Risks and Sanctions
Sanctions against Russia following its aggression in Ukraine have tested Swiss neutrality. Although Switzerland has joined the EU sanctions, it has sparked discussions about its neutral status in the world. In addition, China’s growing influence on the international economy and its desire to annex Taiwan add new risks for banks that must diversify their portfolios to be prepared for any developments.
Relations with the EU
Since Switzerland is surrounded by EU member countries, it is important to maintain strong relations with this union. If Switzerland were to be viewed as just another foreign country, it could create serious problems for its economy. Banks and other financial institutions must take this into consideration when seeking acceptable solutions in negotiations with the EU.
Dubai and the US: Can They Surpass Switzerland?
Competition for the title of “safe haven” between Switzerland, Dubai and the USA is intensifying. While Dubai is actively attracting capital from Russia and other countries, its financial system does not offer the same level of property protection and stability as Switzerland. As for the USA, they are receiving more and more international funds, but Switzerland can handle this competition due to its high level of services and stability.
Adapting to the New World
The modern world has become more dangerous and unstable, but it also opens up new opportunities. Swiss banks must adapt to new conditions, diversify their assets, and understand geopolitical risks. In this world, neutrality takes on new significance, and Switzerland must remain a reliable and predictable haven for investors seeking to protect their assets.
